What does it mean to hodl, stake or farm?
Some crypto terms can be confusing at first, especially as a newbie in the space. Imagine going online and you are seeing a word like HODL, and your brain is like, this word doesn't exist, and being a newbie, you might be forced to actually believe it doesn't exist.
Well, I will be explaining these words and what they represent in the crypto space, lets begin
HODL (HOLD), just as the real word means, HODL is an act of holding a token and not selling it off. Another term that goes hand in hand with HODL is the term Diamond Hands which is a person who hodls no matter the FUD or price dump etc.
People HODL for several reasons, such as the expectation of an airdrop, foreseeing a price pump in the future, a project believer etc.
Staking is an act of locking a single token in a contract to earn incentives over a period of time, in some cases, a staker is being given a PoS ( proof of Stake ) mostly for governance purposes.
There are several benefits of staking, but always ensure the smart contract you are locking up your funds is audited.
Farming is almost similar to staking, just that in Farming, a user locks a Liquidity Token which is always in a pair, e.g, BNB-USDT, USDC-USDT etc
Farming most times have a higher APR than staking, due to the risk that comes with providing liquidity on a DEX.
Would you rather HODL, STAKE or FARM.
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